Comments on: UNG Natural Gas Update for November 7

By: stephen22

stephen22 — Tue, 10 Nov 2009 10:59:08 +0000

I would like to add that UNG shares shed roughly 2% Monday morning, extending a lengthy slide beneath resistance at its 50-day and 100-day moving averages. The security has given up about 65% of its value during the past 52 weeks, and it briefly dipped into single-digit territory earlier this month.

By: terlyn

terlyn — Tue, 10 Nov 2009 08:54:30 +0000

Here is an article dated November 9th, that discusses the dislocation in commodity markets being caused by a rush into commodity ETFs:

http://www.minyanville.com/articles/exchange-tr...

By: stephen22

stephen22 — Tue, 10 Nov 2009 04:59:08 +0000

By: terlyn

terlyn — Tue, 10 Nov 2009 02:54:30 +0000

Here is an article dated November 9th, that discusses the dislocation in commodity markets being caused by a rush into commodity ETFs:

http://www.minyanville.com/articles/exchange-tr...

By: Dan de Man

Dan de Man — Mon, 09 Nov 2009 18:47:25 +0000

Hi Corey,

I bet double bottom. I covered half my short position on Friday. BTW big black candle on SLV today, as well as bearish divergance.

Have a great day!

Regards,
Dan

By: tgarfield

tgarfield — Sun, 08 Nov 2009 16:43:09 +0000

UNG is troubling to chart. First it does not track the NAV very well due to the significant premium from the lack of share creation. Share creation has resumed however the rules on baskets are not simple any more. Direct futures are not allowed, only swaps. Significant value on UNG was lost from contango. That is lost and does not come back making historical charts inaccurate. The chart of $NATGAS is a completely different chart. I wouldn't buy UNG unless $natgas said to, unless UNG said to and unless I had an idea of where and open interest on the futures was going. I don/t think UNG is a simple trade. The $NATGAS chart rolls months at different times than UNG making some of the comparison difficult.
http://stockcharts.com/h-sc/ui?s=$NATGAS&p=D&b=...

Even with the chart you show, UNG is still overvalued compared to it's assets. Backwardation generally starts to kick in some on the march contract (shown in the next 10 years of futures). The contango effect will be lessened but this will come with falling prices. Until interest rates increase, which should help cut contnago on all commodities, ETF commodities are a hard trade..